Correlation Between HYDROFARM HLD and Air Transport
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and Air Transport at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HYDROFARM HLD and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYDROFARM HLD GRP and Air Transport Services, you can compare the effects of market volatilities on HYDROFARM HLD and Air Transport and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HYDROFARM HLD with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Air Transport.
Diversification Opportunities for HYDROFARM HLD and Air Transport
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HYDROFARM and Air is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services and HYDROFARM HLD is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HYDROFARM HLD GRP are associated (or correlated) with Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and Air Transport go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Air Transport
Assuming the 90 days trading horizon HYDROFARM HLD is expected to generate 3.89 times less return on investment than Air Transport. In addition to that, HYDROFARM HLD is 1.22 times more volatile than Air Transport Services. It trades about 0.03 of its total potential returns per unit of risk. Air Transport Services is currently generating about 0.14 per unit of volatility. If you would invest 1,180 in Air Transport Services on September 5, 2024 and sell it today you would earn a total of 900.00 from holding Air Transport Services or generate 76.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Air Transport Services
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Air Transport Services |
HYDROFARM HLD and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Air Transport
The main advantage of trading using opposite HYDROFARM HLD and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD position performs unexpectedly, Air Transport can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Air Transport will offset losses from the drop in Air Transport's long position.| HYDROFARM HLD vs. X FAB Silicon Foundries | HYDROFARM HLD vs. SCOTT TECHNOLOGY | HYDROFARM HLD vs. Sunny Optical Technology | HYDROFARM HLD vs. SMA Solar Technology |
| Air Transport vs. Airports of Thailand | Air Transport vs. Airports of Thailand | Air Transport vs. Aena SME SA | Air Transport vs. AENA SME UNSPADR110 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |